In September 2009, Thomson Reuters (TR) discontinued its practice of relying on analysts to determine the treatment of unexpected charges and gains in favor of their immediate exclusion from GAAP earnings. Adopting a difference-in-differences approach, we show that this plausibly exogenous...

This paper examines linguistic complexity in financial reporting using three measures of semantic progression. Namely, speed reflects how fast the narrative moves, volume reflects how much ground it covers, and circuitousness reflects how much it goes in circles. We find that speed and volume...

In this paper, we develop FinBERT, a state-of-the-art large language model that adapts to the finance domain. Using a sample of researcher-labeled sentences from analyst reports, we document that FinBERT significantly outperforms the Loughran and McDonald dictionary and other machine learning...

In this paper we focus on fair value measurements in the Financial Crisis and its (continuing) aftermath. We consider different ways of measuring fair value; and we use the experience of economies under stress, and where markets deviate significantly from textbook models of symmetric information...

Financial restatements are costly, but frequent, events and many firms restate several times. This paper asks why rational managers engage in misreporting, in spite of the costly consequences. We present a simple extension to the Fischer and Verrecchia (2000) model, which provides testable...

This paper revisits two valuation models based on accounting figures: the Residual Income Valuation (RIV) and Abnormal Earnings Growth (AEG). Our research design has two approaches: i) we demonstrate theoretical integration of both models; and ii) we show in a practical manner that models...

Our study delves into analysts' motivation to issue concurrent cash flow forecasts in addition to earnings forecasts to achieve the analysts' specific strategic objectives. To investigate this motivation, we use economics based signaling theory and psychology based support theory to develop our...

VCs prefer secrecy when searching for targets. As a result, only the investments in viable startups are disclosed but the failed ones are discarded silently. We extend the standard preemption game to explain the efficiency loss and the individual rationale of doing so. We show that secrecy...

We investigate the relation between investor horizon and disclosure policy. We develop and analyze a rational expectations model where the original investors commit to a disclosure policy. Counter to casual intuition, short-horizon investors prefer more disclosure and are willing to bear costs...

We present comprehensive evidence in support of giving liquidity equal standing to size, value/growth, and momentum as investment styles, as defined by Sharpe (1992). First, we show that financial market liquidity, as identified by stock turnover, is an economically significant indicator of...